ANNOTATED TEXT OF CISG
Article 63

(1) The seller may fix an additional period of time of reasonable length
for performance by the buyer of his obligations.

(2) Unless the seller has received notice from the buyer that he will not
perform within the period so fixed, the seller may not, during that period,
resort to any remedy for breach of contract. However, the seller is not
deprived thereby of any right he may have to claim damages for delay in
performance.

Guide to this article

See Mark B. Wessman, 70 Tulane Law Review (1996) 1783, 1791 (describing Nachfrist as a "potential danger point" that "the uninitiated American lawyer accustomed to working with the UCC will find surprising or unfamiliar."); see also E. Allan Farnsworth, Lausanner Kolloquium, Zürich: Schulthess (1985) 83, 105 ("Nachfrist -- We don't understand it, we never heard of it, but we like it"); and Celia R. Taylor, 33 Wake Forest Law Review (1998) 838, 904 (regarding "Nachfrist [as] a valuable addition to the universe of authorized self-help")

* Most members of the Autonomous Network of CISG Websites also offer bibliographies. Many are tailored, concentrating on commentaries by authors from or writing on CISG issues of special interest to specific countries or regions; some, e.g. CISG online are general and extensive; some, e.g., CISG-Belgium and CISG-Finland also list commentaries by individual articles of the CISG.

In the context of comparable notices under Article 47, Will states: "In order to serve its purpose
and to constitute a valid basis for so serious a remedy as avoidance, the notice must warn [the
buyer] that a deadline has been 'fixed'. ... The warning will have to be as unequivocal as the
deadline. Strong invitations expressing something like 'hope to receive [payment] soon' would
certainly not suffice. The warning has to be expressed so clearly that no reasonable [buyer] would
need any interpretation or explication in order to realize that the date indicated constitutes his final
chance to [pay], and that the [seller] is not prepared to go beyond this deadline. ..."
Michael R. Will, Bianca-Bonell Commentary, Giuffrè: Milan (1987), p. 315.

Similarly, Honnold states: "An effective [Nachfrist] notice ... should make clear that the additional
period sets a fixed and final limit on the date for delivery ..." John O. Honnold, "Uniform Law for
International Sales under the 1980 United Nations Convention" [Honnold Text] 2d ed., Kluwer Law
International (1991) p. 370; see also Lief Sevón, in Sarcevic & Volken ed., The Vienna Sales
Convention: History and Perspective" [Dubrovnik Lectures], Oceana (1986), p. 224.

Knapp, however, states:"In fixing the additional period of time under Article 63 the seller need not
warn the buyer that he will declare the contract avoided if the buyer has not performed within the
additional period of time fixed." V. Knapp, Bianca-Bonell Commentary, p. 461.

And Enderlein & Maskow state: "Like Knapp ... and differing from Honnold ... and Sevón ... we
hold that the Nachfrist [need not] be considered as final [nor is it essential that the buyer] be warned by
the seller that he will declare the contract avoided. A formulation like 'We set an additional period
of time for payment on your part until May 31' is in our view sufficient.... [W]e also are of the opinion
that the Nachfrist can be extended, and upon its expiry a new one may be granted. The setting of a
Nachfrist for performance of the most important obligations ... gives the seller an option to either stick
to the contract, e.g. when non-payment is caused by foreseeable temporary difficulties of transfer or make
it void. The seller would be forced into too strict a scheme if in setting a Nachfrist he had to threaten the
buyer with avoidance of the contract. ..." Fritz Enderlein & Dietrich Maskow, "International Sales
Law" [Enderlein & Maskow Commentary], Oceana (1992), p. 238.

Will states: "In fixing an additional period of. time the [seller] must choose one of reasonable
length.... But what precisely is a 'reasonable length'? The answer depends on the particular
circumstances of each case. ..." Bianca-Bonell Commentary, p. 315.

Enderlein & Maskow state: "The vague term of reasonableness leaves some room to act at one's
own discretion which can be used by the party who is entitled to set the Nachfrist, i.e. in this case the seller.
If he fixes too short a period, the competent deciding body could determine the minimum Nachfrist. [*]

"In calculating the additional period, factors have to be taken into account which concern both parties. On
the seller's part, these are: possibilities and costs for storage of the goods (compare also Article 88, paragraph
2) and price developments, e.g. the Nachfrist will be shortened in the event of a rapid decline in prices
because the proceeds from a substitute transaction under Article 75, which presupposes an avoidance of the
contract, would be reduced as a result. On the buyer's part it is the difficulties which he is confronted with
during performance that are of relevance, e.g. when he needs more time than expected for complying with
the so-called formalities in preparing the payment (Article 54) or also in importing the goods. The seller can
take such factors into consideration only when the buyer informs him thereof.

"In the setting of a Nachfrist the postal handling time needed for the information to reach the buyer
has to be considered because the latter must have time to undertake the relevant activities during
that Nachfrist. In the light of the fact that there is a breach of contract by the buyer here, we
believe that the interests of the seller should be decisive. The reasonable period of time should in
general be rather short in such cases. Sevón [Dubrovnik Lectures, p. 225] stresses this, in particular
in regard to the obligation to pay the price. [**]

"In interpreting the term of a reasonable Nachfrist, conformity should be established with the
interpretation of the formulation 'unreasonable delay' in Article 88, paragraph 1 ... namely in such
a way that an unreasonable delay [exists] when the reasonable Nachfrist has expired. Such
conformity is required because the right to resell the goods under Article 88 will produce results
that are similar to those of a substitute transaction under Article 75, so that the conditions in both
cases will have to be aligned so as not to create unfounded alternatives. A substitute transaction
presupposes avoidance of the contract and the latter again presupposes frequently the setting of an
additional period of time for performance." Enderlein & Maskow Commentary, pp. 238-239.

* For a similar view, see van der Velden who states that if a period of time is set that is too short and therefore not "of reasonable
length" as required, and German Nachfrist precedent is followed, as he recommends, courts can de jure enlarge the period of
time to a reasonable period where that appears appropriate . "Indications of the Interpretation by Dutch Courts of the United
Nations Convention on Contracts for the International Sale of Goods 1980" Netherlands Reports to the Twelfth International Congress of Comparative Law-SydneylMelbourne 1986, Gerver, Hondius & Steenhoff eds., T.M.C. Asser
Instituut, The Hague), p. 34. Cf. Audit who states "Where a Convention rule is directly inspired by domestic law, as in
the case of ... the concept of Nachfrist in German law ... the court should not fall back on its domestic law, but interpret the
rule by reference to the Convention." Bernard Audit, "The Vienna Sales Convention and the Lex Mercatoria", Lex
Mercatoria and Arbitration, T. Carbonneau ed., Transnational (1990) p. 154.)

** Cf. Honnold who calls attention to good faith and other factors that may preclude the setting of too short a period of time. He
states "[I]t is conceivable that a sharp increase in the value of the goods might tempt a seller to try to escape from the contract
by sending the buyer a Nachfrist notice fixing a short, final period for taking delivery. The Convention is not without
resources to deal with this problem. Article 63(1) (like Article 47(1)) requires that the Nachfrist notice fix 'an additional period
of time of reasonable length' ... [T]he reasonableness of the period set in the notice should be decided in conformity with the
Convention's general policy against the avoidance of the contract on insubstantial grounds. A seller who has received the
price would seldom face irreparable loss from the buyer's delay in taking delivery. The buyer would be responsible for the
seller's expenses, such as storage, and the seller (Article 85 ...) 'is entitled to retain [the goods] until he has been reimbursed
his reasonable expenses by the buyer'. Moreover, in situations where there is danger of abuse, the requirement that the period
fixed by the seller be of 'reasonable length' (Art. 63(l)) should be construed (Article 7(1)) 'to promote ... the observance of
good faith in international trade' ..." Honnold Text, 2d ed., p. 444.

Knapp states: "Given the purpose of this notice, it should be assumed, contrary to the general rule
of Article 27, that the notice fixing an additional period of time for performance by the buyer does
not become effective until it reaches the buyer. ... The reasonableness of the additional period of
time should be measured from the time at which the buyer receives the notice fixing the
period. If, for instance, the additional period of time has been specified by the seller as 'within
one month from today', the reasonableness of the period so fixed will ... be measured from the
time at which the notice reached the buyer. Hence, if the notice never reaches him, the
additional period of time under Article 63 never starts to run." Bianca-Bonell Commentary, pp.
460, 461-462.

Although it makes sense to consider the anticipated postal handling time needed for the
information to reach the buyer in determining whether the period of time recited in the Nachfrist is
reasonable (see Enderlein & Maskow, op. cit.), Knapp's view that Article 27 does not apply to
seller's Nachfrist notice appears to be in error. At the Vienna Conference it was observed that
"The word 'fix' [as used in Article 47(1) (buyer's counterpart to Article 63(l))] presupposed a
written or oral notice, which was governed by the provisions of [article 27]" (OFFICIAL
RECORDS, p. 339). Article 27 states "Unless otherwise expressly provided in this Part of the
Convention" it applies to "any notice ... made by a party in accordance with this Part ..." (emphasis
added). Elsewhere where there is an intent to depart from Article 27 by applying a receipt test, the
Convention expressly so states-see for example, Articles 47(2), 48(4), 65 and 79(4) and also
the second part of this same article.

Knapp states: "[T]he additional period of time for performance of the buyer's obligation can be
granted to the buyer by the seller only after the latter's failure to perform by the date specified in the
contract, that is, after the buyer has fallen into delay in performing." Bianca-Bonell Commentary, p.
459.

Enderlein & Maskow, however, state: "By contrast to Knapp ... we believe that a Nachfrist can
be set before there is a delay (see also the comparable case of Article 88, paragraph 1 [under which it is
possible for the notice to be given before the conditions for the resale are fulfilled]), e.g. when it
can be anticipated and the buyer signals difficulties. This is not a one-sided modification of the
contract, as Knapp believes. The buyer can still deliver at the time for delivery, and the
reasonable time is to be counted starting at the end of the time for performance." Enderlein
& Maskow Commentary, pp. 237-238.

Seller's other remedies, paragraph (2) of Article 63

["Unless the seller has received notice from the buyer that he will not
perform within the period so fixed, the seller may not, during that period,
resort to any remedy for breach of contract. However, the seller is not
deprived thereby of any right he may have to claim damages for delay
in performance."]

The Secretariat Commentary states: "9. In order to protect the buyer who may be preparing to
perform the contract as requested by the seller, perhaps at considerable expense, during the
additional period of time of reasonable length the seller may not resort to any remedy for breach of
contract, unless the seller has received notice from the buyer that he will not comply with the
request. Once the additional period of time has expired without performance by the buyer, the
seller may not only avoid the contract under [article 64(1)(b)] but may resort to any other
remedy he may have.

"10. In particular, the seller may claim any damages he may have suffered because of the delay
in performance. Such damages may arise event though the buyer has performed his obligations
within the additional period of time fixed by the seller." OFFICIAL RECORDS, pp. 49-50.

Right to avoid the contract

Article 63(2) indicates that, during the pendency of the Nachfrist, seller is precluded
from avoiding the contract unless buyer indicates that he will not perform during that
period.* Sevón states:

"This provision clearly covers a situation where the seller declares the contract avoided for the
same reason which made him fix a period. ... However, during that period some other ground
for avoidance may arise. A situation could be imagined where the buyer, during the
additional period, refuses to take delivery of the goods and this refusal amounts to a
fundamental breach of contract. It would not seem necessary to read the Convention in such
a way that the contract could not be avoided because of a fundamental breach in taking delivery
only because the seller has fixed an additional period for payment of the price".**

* Enderlein & Maskow apply a similar interpretation to seller's right to resell the goods on account of "unreasonable delay"
by the buyer in taking possession of the goods, as provided in Article 88(1). They state: "These are ... rights to early
termination of the contract and/or such which practically amount to it. But this does not refer to the emergency transaction under
Article 88, paragraph 2, which has to be carried out as an obligation of the party obliged to preserve the goods." Enderlein &
Maskow Commentary, p. 239.

** Lief Sevón, "Obligations of the Buyer under Convention on the International Sale of Goods", 106 Juridisk Tidskrift
(Suomen Lainopillinen Yhdistys) 340 (1990).

Other rights of seller

Enderlein & Maskow state: "It is nevertheless indeed problematic when the seller must not exercise
other rights ensuing from a breach of contract ... but rather has to wait and see whether the
buyer performs within the Nachfrist." Enderlein & Maskow Commentary,p. 239.

Right to require buyer to perform

There is a conflict on this subject. Enderlein & Maskow state: "[Within
the additional period of time] the seller cannot require the buyer to
perform under Article 62 (so believes also Plantard [*]). This is acceptable
because the right to require performance and the right to set an additional
period of time for performance are basically variants of the right to obtain
performance between which the seller can choose from the outset." Id. at
239-240.**

Hellner, however, notes that it seems odd that where a seller who has not been paid sets a
Nachfrist, he is thereby barred from an action to compel payment of the price
pursuant to Article 62 during the pendency of the Nachfrist;*** and

Schlechtriem states: "The demand for payment of the purchase price during an additional period
of time surely seems to be possible; art. 63(2) is only meant to prevent the seller from
avoiding the contract during that additional period." Peter Schlechtriem, "Recent Developments
in International Sales Law", 18 Israel L. R. 321 (1993).

** Enderlein & Maskow are also of the opinion that the "specification made by the seller himself as a specific legal
consequence of the non-fulfillment of the obligation of the buyer for specification under Article 65 cannot be made during the
additional period of time ..." Enderlein & Maskow Commentary, p. 240.

Enderlein & Maskow state: "Only the right to claim damages is expressly not blocked. [However]
the same should apply to the right to reimbursement of expenses under Article 85. Since the
rights because of breach of contract are excluded in their entirety, but the right to
compensation of expenses is granted specifically under Article 85, it has to be regarded as
still existent when a Nachfrist is set. Apart from this formal deduction, there is also a
functional interpretation which is orientated towards the objective of the rule. It would be
absurd not to grant the seller the right to reimbursement of expenses in commercial practice
-- preservation of the goods may even be a condition for the setting of an additional period of
time. This would also contradict the basic idea recognizable in the retention of the rights to
claim damages that losses in the property of the seller should be compensated by the buyer also
when a Nachfrist is set, with certain modifications, expenses can be considered as a
specific form of damage in the meaning of Article 74.

"For similar substantive and formal reasons we believe that the entitlement to interest under
Article 78 is also not excluded when a Nachfrist is set. In this case it also has to be
considered that otherwise reimbursement of the damage exceeding the interests could be
required, but that there would be no entitlement to the interests themselves. And finally, we
hold that a right to penalty/liquidated damages, e.g. because of late performance of participatory
obligations in the manufacture of the goods, provided that there is no provision to the
contrary in the contract, would not be excluded by setting an additional period of time. The
considerations made so far also speak in favour of this, with one modification: depending on
the agreement or the applicable law the penalty/liquidated damages constitute(s) either a standard
damage or a standard minimum damage, less frequently a standard maximum damage. Hence,
penalty/liquidated damages do(es) in any case constitute a form of damages for which the same
exemptions apply. Therefore, there seems to be a clear possibility of subsumption under sentence
2.

"Expenses, interests and penalties/liquidated damages can often be claimed as damages, but not
in all cases and sometimes only under additional conditions. But why should the seller be
penalized in such a way when he accommodates the buyer by setting a Nachfrist. Specific
discounts that would be granted for advance payment, immediate payment or similar reasons
should certainly be lost in case of setting a Nachfrist. It becomes evident as a result of this
discussion that only comparable rights and comparable claims are excluded, not however claims
for compensation. But the rule is not formulated very fortunately ..." Enderlein & Maskow
Commentary, pp. 240-241.

Avoidance for another fundamental breach; right to rely on failure caused by buyer

Enderlein & Maskow state: "When a Nachfrist is set for the fulfillment of a specific obligation
under the contract, e.g. taking delivery of the goods, avoidance of the contract is not
excluded during that Nachfrist because of another fundamental breach of contract, e.g.
the cheque handed over for payment is not honoured (Sevón [Dubrovnik Lectures, p. 226]).

"[Also] the option to rely on a failure caused by the other party under Article 80 is not excluded by
the setting of an additional period of time ... This may assume practical relevance among others when a
Nachfrist is set for the fulfillment of obligations to participate in the manufacture of the goods or for the
procurement of guarantees for payment." Id. at 241.